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on Entrepreneurship |
| By: | Florence Honore |
| Abstract: | Start-ups founded by team members with prior shared experience in incumbent firms tend to perform better than other start-ups. While the prior shared experience brings relevant knowledge and coherent routines, the knowledge is also by definition redundant and can corner the new firms in local search and limit innovation. I propose that start-ups may mitigate the negative aspects of shared prior experience by including in the founding team individuals with extensive experience in multiple prior jobs or industries – i.e., job hoppers. I find that job hoppers positively moderate the effect of shared experience on performance. I also find that job hoppers who bring knowledge from outside the start-up industry are beneficial to teams with prior shared experience within the start-up industry and that job hoppers who bring knowledge from the start-up industry are beneficial to teams with prior shared experience outside the start-up industry. Consequently, the job-hoppers may embody both the positive disruptive effect and the introduction of relevant complementary knowledge. With these results, the paper uncovers a novel mechanism that underlies the knowledge complementarities in founding teams. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:14-39&r=ent |
| By: | Ron Jarmin; C.J. Krizan; Adela Luque |
| Abstract: | Minority owned businesses are an increasing important component of the U.S. economy, growing at twice the rate of all U.S. businesses between 2002 and 2007. However, a growing literature indicates that minority-owned businesses may have been especially impacted by the Great Recession. As house prices declined, foreclosures fell disproportionately on urban minority neighborhoods and one of the sources of credit for business owners was severely constrained. Using 2002-2011 data from the Longitudinal Business Database linked to the 2002 Survey of Business Owners, this paper adds to the literature by examining the employment growth and survival of minority and women employer businesses during the last decade, including the Great Recession. At first glance, our preliminary findings suggest that black and women-owned businesses underperform white, male-owned businesses, that Asian-owned businesses outperform other groups, and that Hispanic-owned businesses outperform non-Hispanic ones in regards to employment growth. However, when we look only at continuing firms, black-owned businesses outperform white-owned businesses in terms of employment growth. At the same time, we also find that the recession appears to have impacted black-owned and Hispanic-owned businesses more severely than their counterparts, in terms of employment growth as well as survival. This is also the case for continuing black and Hispanic-owned firms. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:14-36&r=ent |
| By: | Douglas Hanley; Daron Acemoglu; Ufuk Akcigit; William Kerr |
| Abstract: | We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation-in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several steps to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model`s quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy heavily relies on research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policy structures. For example, just relying on carbon taxes or delaying intervention both have significant welfare costs--though their implications for medium run temperature increases are quite different. |
| Keywords: | carbon cycle, directed technological change, environment, innovation, optimal policy |
| JEL: | O30 O31 O33 C65 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:534&r=ent |
| By: | Nagler, Paula; Naude, Wim |
| Abstract: | Although non-farm enterprises are ubiquitous in rural Sub-Saharan Africa, little is yet known about them. The motivation for households to operate enterprises, how productive they are, and why they exit the market are neglected questions. Drawing on the Living Standards Measurement Study -- Integrated Surveys on Agriculture and using discrete choice, selection model and panel data estimators, this paper provide answers using data from Ethiopia, Niger, Nigeria, Malawi, Tanzania, and Uganda. The necessity to cope following shocks, seasonality in agriculture, and household size can push rural households into operating a non-farm enterprise. Households are also pulled into entrepreneurship to exploit opportunities. Access to credit and markets, household wealth, and the education and age of the household head are positively associated with the likelihood of operating an enterprise. The characteristics are also associated with the type of business activity a household operates. Rural and female-headed enterprises and enterprises with young enterprise owners are less productive than urban and male-owned enterprises and enterprises with older owners. Shocks have a negative association with enterprise operation and productivity and a large share of rural enterprises does not operate continuously over a year. Enterprises cease operations because of low profits, a lack of finance, or the effects of idiosyncratic shocks. Overall the findings are indicative that rural enterprises are"small businesses in a big continent"where large distances, rural isolation, low population density, and farming risks limit productivity and growth. |
| Keywords: | Access to Finance,Microfinance,Labor Policies,Rural Poverty Reduction,E-Business |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7066&r=ent |
| By: | Randall S. Jones; Myungkyoo Kim |
| Abstract: | The Korean government has made fostering a “creative economy” a top priority. The goal is to shift Korea's economic paradigm to one based on innovation in which new start-ups and venture businesses play a key role. However, the venture capital market is still at an early stage of development. To make venture investment a growth driver, it is important to expand the role of business angels, activate the merger-andacquisition market and foster entrepreneurship. A creative economy also depends on making SMEs, which account for 87% of employment, more dynamic. The productivity gap between large firms and SMEs, which benefit from a wide range of public support, is widening. SME policies should be streamlined and improved to promote market-based financing and reduce the negative effects of government funding programmes, which discourage the expansion of SMEs. Promouvoir le financement des PME et des jeunes entreprises en Corée Le gouvernement coréen a érigé en priorité la promotion d'une « économie créative ». L'objectif est que la Corée adopte un nouveau paradigme économique fondé sur l'innovation, suivant lequel les jeunes entreprises et les entreprises à risque joueraient un rôle clé. Le marché du capital-risque est cependant encore à un stade précoce de son développement. Pour que l’investissement en capital-risque soit vecteur de croissance, il est primordial de renforcer le rôle des investisseurs providentiels, de développer le marché des fusions-acquisitions et de favoriser l’entrepreneuriat. Une économie créatrice est aussi une économie qui dynamise les PME, lesquelles représentent 87 % de l’emploi. L'écart de productivité entre les grandes entreprises et les PME, qui bénéficient d'un large éventail d'aides publiques, se creuse. Les politiques en faveur des PME doivent être rationnalisées et optimisées pour promouvoir les financements de marché et atténuer l’impact négatif des aides publiques, qui n’incitent pas les PME à se développer. |
| Keywords: | Korea, entrepreneurship, venture business, SMEs, start-ups, crowd-funding, mergers and acquisitions, KONEX, credit guarantees, venture capital investment, business angels, creative economy, KOSDAQ, non-tangible collateral, IPOs, KOSDAQ, KONEX, investissements en capital-risque, investisseurs providentiels, Corée, économie créative, garanties de crédit, introductions en bourse, garantie non tangible, financement participatif, jeunes entreprises, fusion et acquisition, entrepreneuriat, entreprises à risque |
| JEL: | L25 L26 M13 |
| Date: | 2014–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1162-en&r=ent |
| By: | Rijkers, Bob; Arouri, Hassen; Freund, Caroline; Nucifora, Antonio |
| Abstract: | This paper examines private sector job creation in Tunisia over the period 1996-2010 using a unique database containing information on all registered private enterprises, including self-employment. In spite of stable growth of gross domestic product, overall net job creation was disappointing and firm dynamics were sluggish. The firm size distribution has remained skewed toward small firms, because of stagnation of incumbents and entrants starting small, typically as one-person firms (self-employment). Churning is limited, especially among large firms, and few firms manage to grow. Post-entry, small firms are the worst performers for job creation, even if they survive. Moreover, the association between productivity, profitability, and job creation is feeble, pointing towards weaknesses in the re-allocative process. Weak net job creation thus appears to be due to insufficient firm dynamism rather than excessive job destruction. |
| Keywords: | Labor Markets,Microfinance,Small Scale Enterprise,Labor Policies,Science Education |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7068&r=ent |
| By: | Groh, Matthew; McKenzie, David |
| Abstract: | Firms in many developing countries cite macroeconomic instability and political uncertainty as major constraints to their growth. Economic theory suggests uncertainty can cause firms to delay investments until uncertainty is resolved. A randomized experiment was conducted in post-revolution Egypt to measure the impact of insuring microenterprises against macroeconomic and political uncertainty. Demand for macroeconomic shock insurance was high; 36.7 percent of microentrepreneurs in the treatment group purchased insurance. However, purchasing insurance does not change the likelihood that a business takes a new loan, the size of the loan, or how the loan is invested. This lack of effect is attributed to microenterprises largely investing in inventories and raw materials rather than irreversible investments like equipment. These results suggest that, contrary to what some firms profess, macroeconomic and political risk is not inhibiting the investment behavior of microenterprises. However, insurance may still be of value to help firms cope with shocks when they do occur, but the paper is unable to examine this dimension, because the insurance product did not pay out over the course of the pilot. |
| Keywords: | Debt Markets,Climate Change Economics,Access to Finance,Bankruptcy and Resolution of Financial Distress,Insurance Law |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7048&r=ent |
| By: | Edward Lorenz (University of Nice Sophia Antipolis, France; GREDEG CNRS) |
| Abstract: | This paper draws on the results of World Bank Enterprise surveys to investigate the relation between financials constraints and innovation performance for a sample of firms in 9 African nations: Ethiopia, Zimbabwe, Rwanda, the Central African Republic, Uganda, Zambia, Tanzania, Ghana and the Democratic Republic of Congo. In common with much of the recent literature focusing on these issues, the analysis makes use of direct measures of innovation and of financial constraints. The econometric analysis takes into account the potential endogeneity of financing constraints to the firm’s decision to innovate. The results show that financing constraints have a negative impact on the probability of successful innovation and that this negative impact tends to be greater both for small-sized firms compared to large firms and for young firms compared to old firm. The results have important policy implications and strongly suggest that government subsidies and financial support programs for micro and small-sized firms could make a positive contribution to increasing the innovation performance of African nations. |
| Keywords: | Contextual Credit constraints, Innovation, Small and Medium-sized Enterprises, Sub-Saharan Africa |
| JEL: | G32 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2014-29&r=ent |
| By: | Juan A. Máñez (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain); María E. Rochina-Barrachina (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain); Amparo Sanchis-Llopis (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain); Juan A. Sanchis-Llopis (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain) |
| Abstract: | This paper analyses the sources of persistence in conducting R&D activities by SMEs. The data used is a panel of Spanish manufacturing firms drawn from the Survey of Business Strategies (ESEE), for the period 1990-2011. We estimate discrete time proportional hazard models accounting for firm observed and unobserved heterogeneity. Our results are consistent with a process of learning associated with the accumulation of R&D capital and with a self-sustained effect of engagement in R&D activities. In addition, we obtain that persistence in R&D in SMEs is also related to the success-breeds-success, sunk costs and demand-pull hypotheses. Finally, our findings also uncover some interesting differences in the underlying drivers of R&D persistence of SMEs as compared to their larger counterparts. |
| Keywords: | SMEs, R&D activities, persistence, learning, success-breeds-success, sunk costs, demand-pull, discrete time survival models |
| JEL: | C41 L60 O31 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1410&r=ent |
| By: | Patrick Macnamara |
| Abstract: | This paper builds a model of rm dynamics to study the consequences of "limited re-entry" for macroeconomic dynamics. Matched individual-level data from the Current Population Survey indicate that only 8% of unemployed chief executives, on average, find employment again as a chief executive after 12 months. Given the close link between entrepreneurs and chief executives, this suggests that it is very difficult for exiting entrepreneurs to "re-enter" in the future. The model, calibrated to match this observation, indicates that "limited re-entry" has made business cycles more volatile and persistent. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:man:cgbcrp:194&r=ent |
| By: | Pablo Cotler (Department of Economics, Universidad Iberoamericana, Mexico City. Mexico) |
| Abstract: | The opacity with which firms conduct their transactions and hence its limitation to socialize their performance are perhaps one of the factors that limit the rate of productivity growth. Based on a national survey of microenterprises, this paper examines the empirical validity of the predictions derived from a theoretical model that analyze the costs and benefits of being informal. The ecosystem where the entrepreneur works, their expectations of growth, the size of their business and their commercial networks are factors that help may explain why some firms are informal and others not. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:uic:wpaper:0414&r=ent |
| By: | Sophie BOUTILLIER (Lab.RII, ULCO/Clersé-UMR8019, Université Lille Nord de France, RRI); Dimitri UZUNIDIS (Lab.RII, ULCO/Clersé-UMR8019, Université Lille Nord de France, RRI) |
| Abstract: | Qu’est-ce qu’un territoire entrepreneurial durable ? Pour analyser la dynamique de l’innovation dans les territoires industriels dont la reconversion passe par les activités de l’environnement et du développement durable, le chercheur doit répondre à plusieurs questions capitales : Comment définir l’entrepreneuriat innovant ? Comment favoriser l’entrepreneuriat éco-innovant ? Quels rôles et fonctions des institutions et de l'initiative individuelle ? Quelles opportunités et atouts pour l’entrepreneur éco-innovant ? Un territoire entrepreneurial durable peut être défini comme un ensemble territorialisé qui s’efforce de mobiliser des ressources sur le plan social, politique, économique, culturel et environnemental à l’intérieur d’un cadre institutionnel cohérent au service d’une stratégie clairement définie de développement économique et social respectueux de la préservation des ressources naturelles. Un de ses objectifs est la promotion de la création d’éco-entreprises pour réussir un programme de réorientation de sa trajectoire de développement. What is a sustainable entrepreneurial territory? To analyze the dynamics of innovation in industrial areas where conversion ensues from the development of activities related to environment and sustainable development, the researcher has to answer to several crucial questions: How to define innovative entrepreneurship? How to promote eco-innovative entrepreneurship? What are the respective roles and functions of institutions and of individual initiative? What are the opportunities and advantages for the eco-innovative entrepreneur? A sustainable entrepreneurial territory can be defined as a territorialized area that seeks to mobilize social, political, economic, cultural and environmental resources within a coherent institutional framework to serve a clearly defined economic and social development strategy respecting the conservation of natural resources. One of its objectives is to promote the creation of green businesses to successfully complete a reorientation of its development path. |
| Keywords: | territoire entrepreneurial durable, entrepreneuriat, développement durable, développement territorial |
| JEL: | L26 O18 Q01 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:rii:riidoc:283&r=ent |
| By: | Sophie BOUTILLIER (Lab.RII, ULCO/Clersé-UMR8019, Université Lille Nord de France, RRI); Dimitri UZUNIDIS (Lab.RII, ULCO/Clersé-UMR8019, Université Lille Nord de France, RRI) |
| Abstract: | On ne naît pas entrepreneur, on le devient! La socialisation de l’individu est issue des rapports entre les deux catégories fondamentales de l’organisation sociale: les structures sociales et la famille. La personnalité se forme dans la prime enfance. L’acquis de l’individu conditionne sa place dans la société. Nicolaï a mis face à face et aussi a imbriqué les théories structuralistes des économistes avec la psychologie freudienne... Notre objectif est de reprendre, à partir de certaines théories de l’entrepreneur, sa conception de la socialisation pour présenter le comportement de l’entrepreneur. Ce déviant du système économique contribue à sa transformation et peut, toute chose égale par ailleurs, à sa durabilité. The socialization of the individual ensues from the relationship between the two basic categories of social organization: social structures and family. Personality is formed in early childhood. The achievement of the individual determines his place in society. A. Nicolai brought face to face and also nested structuralist theories of economists with Freudian psychology ... Using certain theories of the entrepreneur, our goal is to resume his conception of socialization in order to present the behavior of the entrepreneur. The entrepreneur is the deviant of the economic system who contributes to its transformation and, may all things being equal, to its sustainability.. |
| Keywords: | entrepreneur, système économique, structures sociales |
| JEL: | L26 A13 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:rii:riidoc:282&r=ent |